Grasim Industries - Quarter ended March 2010

21 May 2010

The consolidated cement production increased 10 per cent to 10.24Mt during the quarter while the sales volumes increased nine per cent to 10.36Mt. The overall consolidated top-line rose 11 per cent to INR5474.98 crore.

Excellent performance by the Viscose Staple Fibre (VSF) business and improved volume growth by the cement business enabled Grasim, an Aditya Birla Group company, to post excellent performance during the quarter ended March 2010. The VSF production volume rose 35 per cent to 81,081t while the VSF sales volume rose 31 per cent to 85,714t.

Although the VSF profitability improved the cement profitability was impacted due to low realisation on YoY basis- particularly in the southern region and increased cost. The OPM however improved marginally to 26.2 per cent. After accounting for the finance charges the PBT rose 12 per cent to INR1152.67 crore. The net profit after tax and minority interest increased 15 per cent to INR654.48 crore.

The company has earmarked a total capital outlay of INR4475 crores for its cement business in order to augment the grinding capacity and evacuation facility, logistics infrastructure, waste heat recovery system, captive thermal power plant, modernisation and completion of existing projects.

Other developmentsThe 3.1Mt grinding unit at Kotputli (Rajasthan) became operational during the previous quarter. The combined cement capacity of the company increased to 48.8Mt.

The company has earmarked a total capital outlay of INR4475 crores for its cement business in order to augment the grinding capacity and evacuation facility, logistics infrastructure, waste heat recovery system, captive thermal power plant, modernization and completion of existing projects. The company would require an additional capacity of around 25Mt over the next five years just to retain its market share. The company is examining various options and has a target to start brown-field expansion of 10Mt latest by Q4 FY11 after the completion of the detailed study.

The company plans to set up a 80,000tpa VSF plant at Vilayat (Gujarat) at an estimated outlay of INR1000 crores. The project is likely to be commissioned in FY13. The capacity of the overseas joint venture at China will double from 35,000tpa to 70,000 tonnes per annum by the end of Q1FY11.

The scheme of amalgamation between UltraTech Cement and SCL is progressing as per scheduled. The shareholders and creditors of UltraTech have given their approval to the scheme on March 19, 2010. The merger is expected to be completed by July, 2010.

The company declared a dividend of INR30 per share, which is the same as per last year. Additionally, the Board of Directors of Samruddhi Cement (SCL) has proposed a dividend of INR1.75 per share for six months working. Each Grasim shareholder will be receiving one equity share of INR5 in SCL for every one share held in Grasim on May 28, 2010, the record date fixed for this purpose, in terms of the de-merger scheme.
Published under Cement News